Obama tells business economy must work for all

AP News
Posted: Feb 24, 2011 6:20 PM
Obama tells business economy must work for all

Grappling for ways to bring down the nation's unemployment rate, President Barack Obama urged business leaders Thursday to find ways for middle-class families to share in the economic recovery some in the private sector have already experienced.

"I don't know exactly where your future customers come from if they don't have jobs," Obama said during the first meeting of his newly created jobs and competitiveness council.

The president tasked the 22-member council, comprised of business and labor leaders, with generating ideas for increasing hiring and boosting economic growth in the short-term. He cited streamlining regulations and reforming tax systems as steps he'll consider for creating favorable hiring conditions and bringing down the country's 9 percent unemployment rate.

Despite sluggish hiring, corporate profits are up, and 2010 saw record-setting earnings for some Wall Street banks. But much to the dismay of the Obama administration, many of those companies are keeping trillions of dollars on the sidelines, wary of investing while the economic recovery is still fragile.

Obama said Thursday that the private sector has to do its part to ensure that "we're not simply creating an economy in which one segment of it is doing very well, but the rest of the folks are out there treading water."

Some members of the council said economic data from their companies suggests that disparity already exists.

American Express CEO Kenneth Chenault said affluent Americans are spending again but that lower- and middle-class people are not, in part because they don't have access to credit. And those who do, Chenault said, are wary of using it because of uncertainty over the strength of the economy.

"Seventy-five percent of the credit out there is not being used," Chenault said. "We've got to solve this credit issue."

Obama created the competitiveness council last month, naming General Electric CEO Jeffrey Immelt as its head. The move came as Obama sought to increase his outreach to the business community and shift his economic policies from short-term stabilization to increasing employment, a task that could affect his re-election bid.

Immelt said the council plans to deliver recommendations to the president within 90 days. The White House said the council will hold its next meeting outside of Washington as part of an effort to draw ideas from business owners and workers across the country.